Agency Disclosure
Definition
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
Example
At the first meeting with a potential buyer, the agent provides a written agency disclosure form explaining buyer agency, seller agency, dual agency, and transaction brokerage. The buyer signs acknowledging they received and understood the disclosure.
Exam Tip
Agency disclosure must happen at FIRST SUBSTANTIVE CONTACT — not just casual conversation. Know when substantive contact occurs: discussing specific properties, financial qualifications, or motivation. Providing general market info or open house flyers is NOT substantive.
Related Agency Terms
Agency Relationship
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
Fiduciary Duty
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
Dual Agency
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
Designated Agency
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
Transaction Brokerage
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Agency by Estoppel
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
Test Your Agency Knowledge
Practice with exam-style questions to make sure you can apply Agency Disclosure and other agency concepts.